Is an iPhone made in China and exported to Europe a U.S. export? Is an Apple executive a manufacturing worker? Yes, and yes. At least those could become the answers if a new proposal afoot among some in the administration is allowed to take effect. Federal agencies grouped under the bland-sounding Economic Classification Policy Committee (ECPC) are proposing to radically redefine U.S. manufacturing and trade statistics.
Under the proposal, U.S. firms that have offshored their production abroad – like Apple – would become “factoryless goods” manufacturers. The foreign factories that actually manufacture the goods – like the notorious iPhone-producing Foxconn factories in China – would no longer be manufacturers, but “service” providers for the rebranded “manufacturing” firms like Apple.
It appears the administration has been reading Orwell.
But the problem with this proposed redefinition is not merely that it offends common sense. The “factoryless goods” proposal would deceptively deflate the size of reported, but not actual, U.S. manufacturing trade deficits, while artificially inflating the number of U.S. manufacturing jobs overnight.
See? We didn’t really offshore all that manufacturing!
It was good that you made the Orwell reference. This change in language is all about taxes. Those Chinese workers will become a cost of labor deduction for US corporations on their tax returns even though they work in China. Import fees on imported goods is far less expensive then the tax rate on corporate profits. We all already know that that 6.1% unemployment rate is a load of nonsense. The wealth gap between the 1% and the 99% is what’s important.